Correlation Between Games Workshop and Litigation Capital
Can any of the company-specific risk be diversified away by investing in both Games Workshop and Litigation Capital at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Games Workshop and Litigation Capital into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Games Workshop Group and Litigation Capital Management, you can compare the effects of market volatilities on Games Workshop and Litigation Capital and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Games Workshop with a short position of Litigation Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Games Workshop and Litigation Capital.
Diversification Opportunities for Games Workshop and Litigation Capital
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Games and Litigation is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Games Workshop Group and Litigation Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litigation Capital and Games Workshop is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Games Workshop Group are associated (or correlated) with Litigation Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litigation Capital has no effect on the direction of Games Workshop i.e., Games Workshop and Litigation Capital go up and down completely randomly.
Pair Corralation between Games Workshop and Litigation Capital
Assuming the 90 days trading horizon Games Workshop Group is expected to generate 0.77 times more return on investment than Litigation Capital. However, Games Workshop Group is 1.3 times less risky than Litigation Capital. It trades about 0.25 of its potential returns per unit of risk. Litigation Capital Management is currently generating about -0.29 per unit of risk. If you would invest 1,308,632 in Games Workshop Group on November 3, 2024 and sell it today you would earn a total of 147,368 from holding Games Workshop Group or generate 11.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Games Workshop Group vs. Litigation Capital Management
Performance |
| Timeline |
| Games Workshop Group |
| Litigation Capital |
Games Workshop and Litigation Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Games Workshop and Litigation Capital
The main advantage of trading using opposite Games Workshop and Litigation Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Games Workshop position performs unexpectedly, Litigation Capital can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Litigation Capital will offset losses from the drop in Litigation Capital's long position.| Games Workshop vs. Central Asia Metals | Games Workshop vs. Rosslyn Data Technologies | Games Workshop vs. Public Storage | Games Workshop vs. Silver Bullet Data |
| Litigation Capital vs. Bankers Investment Trust | Litigation Capital vs. Dairy Farm International | Litigation Capital vs. Chrysalis Investments | Litigation Capital vs. Lowland Investment Co |
Check out your portfolio center.Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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